We live in a credit nation. The mistakes in handling credit are well documented but even so no one would dispute the importance of having good credit. Your credit score, when handled properly, can give you many advantages to creating wealth through leverage. Here are some credit basics to improving your scores.

Step 1: Determine what needs Improvement? Your first order of duty is to determine exactly what derogatory and incorrect items show on your credit report. There are several ways to accomplish this but the easiest is simply going directly to the source. There are 3 credit bureaus that creditors use. They are as follows; www.equifax.com, www.transunion.com, and www.experian.com.

Make sure that you order your reports from these three bureaus and not go to any free credit report offer. Many times you will find that the report is not free and they do not offer your score either. They are primarily interested in upselling you into some sort of monthly credit monitoring plan.

Once you receive your reports then take note of each one separately. All three bureaus report based on different matrices and will reflect different information. Note what items are derogatory. A derogatory item is any item that is listed as a public record or that has a late payment.

Step 2:Dispute the issues. Make sure that when you dispute the incorrect and derogatory items that you do it by hand written letters in your own words. Do not use the standard bureau forms that are provided. The employees at the bureaus are real people trained to be on the look out for credit repair companies and false disputes. You will get a better response by taking the time to personalize things.

Go after all the incorrect information on your credit report. You can see a quick jump in your credit score by simply correcting false information. If, on the other hand, there are items on you rreport that are yours then you are better served by contacting the creditors directly. Many creditors will remove derogatory information at the request of a current client.

Step 3: Sit it out or Pay. Eventually almost all derogatory credit will come off your credit report after 7 years. In some cases you are better waiting it out then investigating. If you are close to the 7 year period then investigating the account could reactivate the derogatory and you will see an immediate drop in credit score. So take care in disputing an item that is old and that you cannot prove to be incorrect.

You can see an immediate benefit to your score by adjusting the balances of your credit cards. A good rule of thumb is to never allow your cards to go over 50% of available balance and preferable 30%. Having one card at zero and another maxed out will cause a lower score than having each card at 30% of max. Transfer part of the balance onto that card with zero and balance your accounts.

Step 4: Be cautious in establishing new credit and especially don’t close old accounts. It’s important to know that one of the major contributing factors in your credit score is the length of time that credit has been established. Older accounts, even ones you’ve not used, will positively effect your score. Newer accounts will skew the average and lower your score.

By applying these basic steps you can fix or maintain your credit. Though it is not an easy task it is worth the effort. There are some cases where using a reputable credit repair agency is helpful but first apply these simple steps that I’ve outlined here and you’ll be on your way to great credit and financial security.